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Profit or loss for the financial year.
Profit and loss account list. Expenses and losses are shown on the debit side of Profit Loss Account. What are the components of Profit and Loss Account. Purpose For knowing the gross profit or gross loss of a business.
Profit and loss account or Income statement is used to find the net profitloss of the business for an accounting period. Office Salaries Postage Telephone Traveling Conveyance Legal Charges. Profit or loss may be considered in two ways which both give the same result.
The wealth of the business is the amount it is worth to the owners the shareholders. If there is gross loss it is transferred to its debit side. It is calculated by deducting indirect expenses from the Gross ProfitLossand adding indirect incomerevenue int the Gross ProfitLoss.
It is prepared to find out the Net Profitloss of the business for the particular accounting period. Profit and loss account A profit and loss account in report form and according to the nature of expense method mentions sales revenue as the first item. Profit and loss account is prepared in the form of ledger and hence it contains two sides.
Profit and Loss Statement is prepared to ascertain the net profit or net loss made by the company during the accounting period Accounting Period Accounting Period refers to the period in which all financial transactions are recorded and financial statements are prepared. The PL statement shows a companys ability to generate sales manage expenses and create profits. Usually the profit and loss account is prepared monthly quarterly or annually.
Explain them All expenses losses incomes and gains are the components of Profit and Loss Account. The profit and loss account shows the change in wealth of the business over a period. All the items of revenue and expenses whether cash or non-cash are considered in this account.
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